In S&I Electrical Plc v HMRC [2015] UKUT 162 (31 March 2015) the UT found that the fact that missing trader intra-community (MTIC) fraud was not established did not preclude HMRC from denying the recovery of input tax.
S&I bought and sold mobile phones. HMRC had denied S&I the recovery of input tax on most of the phones on the grounds that they had been purchased from a person that had fraudulently evaded VAT; and that S&I knew or ought to have known that the transactions were connected with fraud.
The issue was whether it could be found that a trader should have known of fraud when it was not proven that fraud did exist (as fraud had not been established in relation to some of the transactions).
The UT noted the FTT’s finding of fact that S&I’s director had not directed his mind to the...
